Commentary
The rapid rise and near dominance of the ESG (Environmental, Social and Governance) agenda in corporate board rooms and executive suites is one of the more remarkable business transformations of the 21st century.
ESG requires that directors and managers look beyond their traditional and singular focus on shareholder value creation, usually but not always found through profit maximization, to consider other non-financial “stakeholder” concerns such as the global environment, creating more “equitable,” “inclusive,” or “diverse” organizations, and “the greater good,” for both local communities and society at large, whatever that may mean.
To be sure, no business operates successfully over the long run without considering its impact on its employees, community, and environment. This form of corporate social responsibility is beneficial and necessary. No one wants to return to the polluted rivers, lakes, and air that characterized the 1960s and 1970s before environmental impact became a sustained focus of corporate America. However, in its stronger modern form, ESG has distorted investment decision-making and brought untold harm to America’s corporations and economy….